Posted by Jeff Berk, BOLT International: In many categories, (rheumatoid arthritis, psoriasis, osteoporosis just to make the point) payers have passed the tipping point, and now they can drive prescribing based on whether parenteral dosing requires an infusion. Gastroenterology is not yet one of them, but the handwriting is on the wall. This was a sore point with the physicians who we interviewed for BOLT’s most recent Gastroenterology Thought Leader panel. So, here are some of my thoughts, and those of my panelists, on the cost of treatment of Crohn’s and ulcerative colitis:
- The pharmacoeconomics of IBD drugs trade off the high cost of biologics vs the higher cost of hospitalizations for colectomy. The system cost for one year of anti-TNF therapy is $33,000 – $36,000. The average hospital stay is 8.7 days (surgical, 9.6 days; medical, 7.5 days), depending on the time necessary for bowel activity to return and for the patient to tolerate taking anything by mouth. The average charge is $43,542 (surgical, $57,015; medical, $25,515), including physician fees, which averaged $8,916 (surgical, $13,797; medical, $2,406).
“There have been some studies that have come out that show that if you avoid a few surgeries, a few hospitalizations; it pays for itself. As a group, we don’t pay as much money to treat these patients. I believe that. So it is worthwhile spending 36,000 dollars on an individual patient per year because a few years down the road he is going to have less surgeries, more productivity in his life and fewer hospitalizations. The average Crohn’s patient that you see who ends up in a hospital visit how long is that patient in and what happens to that patient in terms of procedures that rack up this cost? That is also very variable. If they come in and we play around a little bit for four or five days and they need surgery and they stay for a week or so after surgery you are right you have got procedure costs, you have got the surgery costs, which are somewhere around 10,000 dollars. That is the surgeon’s cost. You have got the hospital bill. It is going to be 100,000 dollars or more for that two week stay. If they don’t have surgery, if you are just treating a flare and they get better and they are in for four or five days, okay, you get away with maybe 10,000 dollars, not 100,000 dollars. You have got both at all times”.
- 3rd-party payers are balking at the $500 reimbursement for infusions in the community unless patients have failed sub-q drugs first. And for the infusions, the insurance companies are requiring that they be given by an in-home nurse, and not by the gastroenterologist’s office. For rheumatoid arthritis and psoriasis this was okay medically as well, since there is no significant efficacy advantage for Remicade vs Humira (or in those diseases, Enbrel as well). In Crohn’s and ulcerative colitis, there is much more friction with physicians because infliximab is clearly superior. While the rheumatologists are surrendering their infusion centers, and the dermatologists never wanted to give infusions in the first place, the gastroenterologists are by and large standing their ground. Ultimately we expect to see reimbursement for a few infusions but then a push to switch to an injection based therapy.
“I want to be clear because the IV therapy is very costly for the payers. It demands 500 bucks for the infusion. Right. If I would be a US payer I would decrease this fee for the doctor. There is no reason why I should give them these fees but that is their philosophy”.
“I think the companies are all gun shy about what the insurance companies are going to allow us to do. So they are looking at pharmacoeconomic modeling to see do they really save money downstream? The insurance companies are taking a very hard line. Let me tell you what is going on in Boston. Blue Cross Blue Shield instituted a Humira first policy about a year and a half ago. They want all newly diagnosed patients with Crohn’s disease to go on Humira unless you write a reason why they need to go on a different drug. Is that because they don’t have to pay for the administration? Absolutely. It is cheaper for them. So the argument we made was that there is no evidence that one anti-TNF is better, therefore, let the doctor decide which anti-TNF is best for the patient. Their response was you just told us that no anti-TNF is better than the other so we are going to tell you which one we want you to use. If you want to use something that is not number one on the list then you have to make the case for it. Let me play devil’s advocate. What is wrong with that? What is wrong with that is that my patient may want an infusion and I don’t want to have to give them an injection and I am a busy man and I don’t want to deal with the hassle of having to convince the insurance company that I want to do it a different way. Or I’ll play the devil’s advocate, on my end is that I have an infusion unit and I have been giving infliximab for the past 12 years and I think it is the best drug in the world and I don’t want to switch people to injectables. So again, I think that is being crass, but that may be the case in some people. I think the reality is that it is great to give patients choices. Now in my personal practice 65 to 70 percent of people ultimately opt out for the injectable so it is not a problem. The point I am trying to make is that the pharmaceutical companies are going to have to make the case that well maybe giving infliximab has higher start up costs because of infusions but we prevent more hospitalizations or something of that nature. But it is even getting worse than that. Fallon, which is a small player, told us last month that they are not going to pay for infusions in an infusion unit. They said all of your patients are going to have to get infusions at home by a visiting nurse. I am listening, but that is not going to fly. Believe me, we have sent letters to Fallon and they seem to be hanging tough on this. We are saying that, yes, it is very rare that people get infusion reactions but they can be life threatening and the question is whether a visiting nurse can handle these kind of things. The point I am trying to make it that the companies are going to have to prove that they save money to convince the insurance folks to continue to use their drug. Now in RA I can see where infusions are going by the wayside just because there are so many more options”.
“I think that most of your advisors you are speaking to are in the United States. So certainly in the US the providers have now caught on that even though the costs come from different silos for intravenous medication that the total cost of an IV administration is higher than subcutaneous. I think that you will see more and more pushback if within any class of drug if there is a subcutaneous alternative that there will be a push that the subcutaneous will be the preferred strategy at the provider perspective and I think physicians will be just forced to go in that direction. I don’t think it is going to be different in Crohn’s disease than it is in rheumatoid arthritis so I would agree with that”.
- To complicate this, sub-q drugs like Humira come out of a pharmacy budget, while IVs like Remicade come out of a hospital budget. There are US patients who can’t afford their sub-q paid copay, but if they get hospitalized, their insurance will pick up the cost of an IV infusion. So the 3rd-party payer won’t pay for the cheaper drug because it is not given in a hospital setting, yet they pay for the more expensive therapy (drug + administration cost + hospitalization) because it is given in a hospital setting.
“It is a lot cheaper for the insurance companies to not have to pay for the infusions. Yeah, but Humira is a pharmacy cost whereas Remicade is a medical cost”.
“There is no problem with the subcutaneous. They work fine. The drug itself costs about the same amount of money but the infusion cost raises the price. So that is interesting. The payers would rather pay subcutaneous. However, because the infusions are given in a hospital setting, you know, Remicade, they are more likely to pay for that than they will for the subcutaneous. There are patients who can’t get the subcutaneous paid for by their insurance company. Isn’t that weird? They won’t pay for the cheaper one because it is not given in a hospital setting, yet they pay for the more expensive one because it is given in a hospital setting and the patients can’t afford not to have it paid for. Payment is huge for these things because they cost so much money and nobody can afford it. Payers can’t afford it and the patients can’t afford it”.